Correlation Between Lumen Technologies and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Lumen Technologies and Singapore Telecommunicatio at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Lumen Technologies and Singapore Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumen Technologies and Singapore Telecommunications PK, you can compare the effects of market volatilities on Lumen Technologies and Singapore Telecommunicatio and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Lumen Technologies with a short position of Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumen Technologies and Singapore Telecommunicatio.
Diversification Opportunities for Lumen Technologies and Singapore Telecommunicatio
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lumen and Singapore is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Lumen Technologies and Singapore Telecommunications P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio and Lumen Technologies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Lumen Technologies are associated (or correlated) with Singapore Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Telecommunicatio has no effect on the direction of Lumen Technologies i.e., Lumen Technologies and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between Lumen Technologies and Singapore Telecommunicatio
Given the investment horizon of 90 days Lumen Technologies is expected to generate 6.16 times more return on investment than Singapore Telecommunicatio. However, Lumen Technologies is 6.16 times more volatile than Singapore Telecommunications PK. It trades about 0.07 of its potential returns per unit of risk. Singapore Telecommunications PK is currently generating about 0.05 per unit of risk. If you would invest 230.00 in Lumen Technologies on August 29, 2024 and sell it today you would earn a total of 535.00 from holding Lumen Technologies or generate 232.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lumen Technologies vs. Singapore Telecommunications P
Performance |
| Timeline |
| Lumen Technologies |
| Singapore Telecommunicatio |
Lumen Technologies and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumen Technologies and Singapore Telecommunicatio
The main advantage of trading using opposite Lumen Technologies and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumen Technologies position performs unexpectedly, Singapore Telecommunicatio can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Singapore Telecommunicatio will offset losses from the drop in Singapore Telecommunicatio's long position.| Lumen Technologies vs. Liberty Broadband Srs | Lumen Technologies vs. Ribbon Communications | Lumen Technologies vs. Liberty Broadband Srs | Lumen Technologies vs. Shenandoah Telecommunications Co |
| Singapore Telecommunicatio vs. KDDI Corp | Singapore Telecommunicatio vs. Amrica Mvil, SAB | Singapore Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. FingerMotion |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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